Mobile Revolution : The Exponential Rise of M-Banking

The intensifying struggle midst financial institutions and Mobile Network Operators in Pakistan for mobile banking has transformed the motherland into a simulated workshop for inventions in fiscal facilities that have transformed the country into an arcade worth observing for the globe. The coming years will provide a number of lessons to viewers worldwide with regards to mobile banking.

Our motherland has experienced an out-rivaling development in both mobile and banking segments since their privatization & de-regulation; currently we are observing unification of their goods and facilities. In the words of the State bank of Pakistan, progress and improvement in Pakistan’s financial sector has been outstanding and extraordinary in the current era.

Pakistan has about Rs2.3 trillion rupees presently in circulation. According to the last figures released by the State Bank of Pakistan, in spite of this, only 14 % of the mature populace has any contact with proper financial services. If the opening affiliation is plotted among the statistics of bank accounts against the number of mobile users (more than 60%), there exists an understandable gap of enablement of the un-banked inhabitants of the nation typically existing in country and distant zones. This opening can be renovated into a tangible business opportunity through mobile banking facilities. Mobile banking will put a stop to this financial marginalization.

A report of CGAP, the worldwide commerce body devoted to progressing financial entree for the realm’s deprived, forecasts that Pakistan might soon see an even superior rush in new mobile and agent banking facilities.

The indicators of Consumer Acceptance and Success

The two major enterprises were sprung by Tameer Microfinance Bank, backed by mobile network operator Telenor, and UBL, a key commercial bank. First MicroFinance Bank and Dubai Islamic Bank Pakistan have also been acknowledged branchless banking certificates and have started model platforms. Telenor and Tameer Microfinance Bank, run the “easypaisa” facility, over which clients even those devoid of a Tameer account or a Telenor telephone can pay bills or make transferals with the help of one of 12,000 easypaisa representatives. Presently, 380,000 transactions take place through Easypaisa platforms on a daily basis and nearly six Million unique customers use Easypaisa services every month. 

The Bright Future

UBL inaugurated UBL Omni in April 2010, proposing a similar variety of over-the-counter facilities and, similar to easypaisa, clients can also use private accounts over their mobiles. UBL Omni has fortified some agreements to make millions of expenditures on behalf of government and non-government organizations, counting the Benazir Income Support Program, the government’s flood relief effort, and the World Food Program. Other organizations preparing to arrive in the marketplace comprise TCS, Pakistan’s major courier and logistics firm with 400 channels nationwide, and MCB, a commercial bank with over 1,100 branches.


Recent Developments

As of this month, Easypaisa has become the first Pakistani mobile money service in Pakistan to work directly within the existing banking infrastructure. This has been achieved by the launch of the Inter Bank Fund Transfer (IBFT) service which has made possible the transfer of funds between a number of Banks using the 1-link switch. This service is available to both Mobile Account holders and Over-the-Counter (OTC) customers. With a Mobile Account, customers are now able to transfer money from any Bank Account directly into their Easypaisa Mobile Account and vice versa.

For those wishing to utilize the OTC services, all they have to do is visit any of the 40,000 shops currently offering the Easypaisa service and deposit money directly into a Bank Account, using just their CNIC and bank account number. This is a significant development in the field of branchless banking as with this new service, anyone can deposit money directly into any account they choose, outside working hours and without having to visit an ATM.

Meezan Bank is also set to launch its own mobile banking and application services in partnership with a mobile financial services (MFS) company, Inov8 (i8), this year. 

From the year 2011 to 2013, the number of branchless banking transactions has seen a 327% growth, while the value has grown by almost 400% in the three years, reaching Rs. 224 billion. The State Bank reports the increase in the number of mobile banking transactions at 130%, and the value of these has gone up by 381%. The number of branchless banking accounts is now at 2.97 billion.

Further Evolution

Though, the current supervisory charter accessible underneath the Electronic Transfer Act (2005) and Branchless Banking Regulations (2008) propagated by State Bank of Pakistan is founded on a 1-to-1 affiliation. This suggests a handy organization among a single bank and a single mobile operator obliged to grow their own expense solutions.

Following numerous communal interchanges organized on the theme of mobile business, it was sensed that there is a huge necessity to grow a amalgamated and exposed governing agenda for promotion of mobile banking services in the country. A Third Party Solution structure may be chosen for mobile business dealings in the republic. A system assembling Mobile Operators (giving the m-commerce interface), Financial Banks (giving financial services), Consumer (the End-user utilizing mobile banking services) and a TPS (A third party merchant integrating the three players).